Exhibit 10.1


 


WATER PIK TECHNOLOGIES, INC.


 


1999 INCENTIVE PLAN


 


(As Amended and Restated as of May 13, 2004)


 


ARTICLE I


 


PURPOSE AND ADOPTION OF THE PLAN


 


1.01.                        Purpose.  The purpose of the Water Pik Technologies,
Inc. 1999 Incentive Plan (hereinafter referred to as the “Plan”) is to assist
in attracting and retaining highly competent employees, to act as an incentive
in motivating selected officers and other key employees of Water Pik
Technologies, Inc. and its Subsidiaries to achieve long-term corporate objectives
and to enable cash incentive awards to qualify as performance-based for
purposes of the tax deduction limitations under Section 162(m) of the
Code.


 


1.02.                        Adoption
and Term.  The Plan has been
approved by the Board of Directors of Water Pik Technologies, Inc., to be
effective as of the effective date of the distribution by Allegheny Teledyne
Incorporated to its stockholders of Water Pik Technologies, Inc. Common Stock
(the “Effective Date”), but is subject to the approval of the stockholders of the
Company.  The Plan shall have a fixed
term of ten years from the Effective Date unless earlier terminated by action
of the Board; provided, however, that no Incentive Stock Option may be granted
hereunder after the tenth anniversary of the Effective Date and the provisions
of Articles VII, VIII and X and Section 9.01 and 9.02 with respect to
performance-based awards to “covered employees” under Section 162(m) of
the Code shall expire as of the fifth anniversary of the most recent approval
by the stockholders of the Company of this Plan (whether initially or as
amended).


 


ARTICLE II


 


DEFINITIONS


 


For the purpose of this Plan, capitalized terms shall have the
following meanings:


 


2.01.                        Award
means any one or a combination of Non-Qualified Stock Options or Incentive
Stock Options described in Article VI, Stock Appreciation Rights described
in Article VI, Restricted Shares described in Article VII,
Performance Awards described in Article VIII, Stock Units described in
Section 9.03, Awards of cash or any other Award made under the terms of
the Plan.


 

















 


2.02.                        Award
Agreement means a written agreement between the Company and a Participant
or a written acknowledgment from the Company to a Participant specifically
setting forth the terms and conditions of an Award granted under the Plan.


 


2.03.                        Award
Period means, with respect to an Award, the period of time set forth in the
Award Agreement during which specified target performance goals must be
achieved or other conditions set forth in the Award Agreement must be satisfied.


 


2.04.                        Beneficiary
means an individual, trust or estate who or which, by a written designation of
the Participant filed with the Company or by operation of law, succeeds to the
rights and obligations of the Participant under the Plan and the Award
Agreement upon the Participant’s death.


 


2.05.                        Board
means the Board of Directors of the Company.


 


2.06.                        Change
in Control means, and shall be deemed to have occurred upon the occurrence
of, any one of the following events:


 


(a)                                  The acquisition in one or more
transactions, other than from the Company, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of a number of Company Voting Securities in excess of 25% of the
Company Voting Securities unless such acquisition has been approved by the
Board;


 


(b)                                 Any election has occurred of
persons to the Board that causes two-thirds of the Board to consist of persons other
than (i) persons who were members of the Board on the Effective Date and (ii)
persons who were nominated for elections as members of the Board at a time when
two-thirds of the Board consisted of persons who were members of the Board on
the Effective Date, provided, however, that any person nominated for election
by a Board at least two-thirds of whom constituted persons described in clauses
(i) and/or (ii) or by persons who were themselves nominated by such Board
shall, for this purpose, be deemed to have been nominated by a Board composed
of persons described in clause (i);


 


(c)                                  Approval
by the stockholders of the Company of a reorganization, merger or
consolidation, unless, following such reorganization, merger or consolidation,
all or substantially all of the individuals and entities who were the
respective beneficial owners of the Outstanding Common Stock and Company Voting
Securities immediately prior to such reorganization, merger or consolidation,
following such reorganization, merger or consolidation beneficially own,
directly or indirectly, more than seventy five percent (75%) of, respectively,
the then outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the election
of directors or trustees, as the case may be, of the entity resulting from such
reorganization, merger or consolidation in substantially the same proportion as
their


 


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ownership of the Outstanding Common Stock and
Company Voting Securities immediately prior to such reorganization, merger or
consolidation, as the case may be; or


 


(d)                                 Approval
by the stockholders of the Company of (i) a complete liquidation or dissolution
of the Company or (ii) a sale or other disposition of all or substantially all
the assets of the Company.


 


2.07.                        Code
means the Internal Revenue Code of 1986, as amended. References to a
section of the Code shall include that section and any comparable
section or sections of any future legislation that amends, supplements or
supersedes said section.


 


2.08.                        Committee
means the Committee defined in Section 3.01.


 


2.09.                        Company
means Water Pik Technologies, Inc., a Delaware corporation, and its successors.


 


2.10.                        Common
Stock means Common Stock of the Company, par value $0.01 per share.


 


2.11.                        Company
Voting Securities means the combined voting power of all outstanding voting
securities of the Company entitled to vote generally in the election of
directors to the Board.


 


2.12.                        Date
of Grant means the date designated by the Committee as the date as of which
it grants an Award, which shall not be earlier than the date on which the
Committee approves the granting of such Award.


 


2.13.                        Exchange
Act means the Securities Exchange Act of 1934, as amended.


 


2.14.                        Exercise
Price means, with respect to a Stock Appreciation Right, the amount
established by the Committee in the Award Agreement which is to be subtracted
from the Fair Market Value on the date of exercise in order to determine the
amount of the payment to be made to the Participant, as further described in
Section 6.02(b).


 


2.15.                        Fair
Market Value means, on any date, the average of the high and low quoted
sales prices of a share of Common Stock, as reported on the Composite Tape for
New York Stock Exchange Listed Companies on such date or, if there were no
sales on such date, on the last date preceding such date on which a sale was
reported.


 


2.16.                        Incentive
Stock Option means a stock option within the meaning of Section 422 of
the Code.


 


2.17.                        Merger
means any merger, reorganization, consolidation, exchange, transfer of assets
or other transaction having similar effect involving the Company.


 


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2.18.                        Non-Qualified
Stock Option means a stock option which is not an Incentive Stock Option.


 


2.19.                        Options
means all Non-Qualified Stock Options and Incentive Stock Options granted at
any time under the Plan.


 


2.20.                        Outstanding
Common Stock means, at any time, the issued and outstanding shares of Common
Stock.


 


2.21.                        Participant
means a person designated to receive an Award under the Plan in accordance with
Section 5.01.


 


2.22.                        Performance
Awards means Awards granted in accordance with Article VIII.


 


2.23.                        Performance
Goals means operating income, operating profit (earnings from continuing
operations before interest and taxes), EBITDA (earnings before interest, taxes,
depreciation and amortization), free cash flow, IBT (income before taxes),
earnings per share, return on investment or working capital, return on average
capital employed, return on stockholders’ equity, any other measurement of
business value, economic value added (the amount, if any, by which net
operating profit after tax exceeds a reference cost of capital), reductions in
inventory, inventory turns and on-time delivery performance, any one of which
may be measured with respect to the Company or any one or more of its
Subsidiaries and divisions and either in absolute terms or as compared to
another company or companies, and quantifiable, objective measures of
individual performance relevant to the particular individual’s job
responsibilities.


 


2.24.                        Plan
means the Water Pik Technologies, Inc. 1999 Incentive Plan as described herein,
as the same may be amended from time to time.


 


2.25.                        Purchase
Price, with respect to Options, shall have the meaning set forth in
Section 6.01(b).


 


2.26.                        Restoration
Option means a Non-Qualified Stock Option granted pursuant to
Section 6.01(f).


 


2.27.                        Restricted
Shares means Common Stock subject to restrictions imposed in connection
with Awards granted under Article VII.


 


2.28.                        Retirement
means early or normal retirement under a pension plan or arrangement of the
Company or one of its Subsidiaries in which the Participant participates.


 


2.29.                        Rule
16b-3 means Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act, as the same may be
amended from time to time, and any successor rule.


 


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2.30.                        Stock
Appreciation Rights means awards granted in accordance with
Article VI.


 


2.31                           Stock Unit means a
unit of value, equal at any relevant time to the Fair Market Value of a share
of Common Stock, established by the Committee as a means of measuring the value
of a Participant’s Stock Unit Account.


 


2.32                           Stock Unit Account
means the bookkeeping account maintained by the Committee on behalf of each
Participant who is credited with Stock Units and dividend equivalents thereon
pursuant to Section 9.03.


 


2.33                           Stock Option Gain
shall mean, with respect to the exercise of a Non-Qualified Stock Option
(whether an option granted under this Plan or any other plan sponsored by the
Company), the number of shares of Common Stock issuable with respect to such
exercise that exceed the number of shares of Common Stock delivered to the
Company (or deemed delivered to the Company) as payment of the exercise price
for such stock option.


 


2.34.                        Subsidiary
means a subsidiary of the Company within the meaning of Section 424(f) of
the Code.


 


2.35.                        Termination
of Employment means the voluntary or involuntary termination of a
Participant’s employment with the Company or a Subsidiary for any reason,
including death, disability, retirement or as the result of the divestiture of
the Participant’s employer or any similar transaction in which the
Participant’s employer ceases to be the Company or one of its
Subsidiaries.  Whether entering military
or other government service shall constitute Termination of Employment, or whether
a Termination of Employment shall occur as a result of disability, shall be
determined in each case by the Committee in its sole discretion.


 


ARTICLE III


 


ADMINISTRATION


 


3.01.                        Committee.                                     The
Plan shall be administered by a committee of the Board (“Committee”) comprised
of at least two persons.  The Committee
shall have exclusive and final authority in each determination, interpretation
or other action affecting the Plan and its Participants.  The Committee shall have the sole
discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions
on Awards as it determines appropriate, and to take such steps in connection
with the Plan and Awards granted hereunder as it may deem necessary or
advisable.  The Committee shall not,
however, have or exercise any discretion that would disqualify amounts payable
under Article X as performance-based compensation for purposes of
Section 162(m) of the Code, or have any authority to substitute any Awards
or use any other methods that would constitute a “repricing” under


 


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the rules of the New York Stock Exchange.  The Committee may delegate such of its powers and authority under
the Plan as it deems appropriate to a subcommittee of the Committee and/or
designated officers or employees of the Company.  In addition, the full Board may exercise any of the powers and
authority of the Committee under the Plan. In the event of such delegation of authority
or exercise of authority by the Board, references in the Plan to the Committee
shall be deemed to refer, as appropriate, to the delegate of the Committee or
the Board.  Actions taken by the
Committee or any subcommittee thereof, and any delegation by the Committee to
designated officers or employees, under this Section 3.01 shall comply
with Section 16(b) of the Exchange Act, the performance-based provisions
of Section 162(m) of the Code, and the regulations promulgated under each
of such statutory provisions, or the respective successors to such statutory
provisions or regulations, as in effect from time to time, to the extent
applicable.


 


ARTICLE IV


 


SHARES


 


4.01.                        Number
of Shares Issuable.  The maximum
number of shares of Common Stock authorized to be issued under the Plan shall
be 1,900,000 shares.  In addition to
such amount, for each share of outstanding restricted stock (that was
originally granted under the terms of the Water Pik Technologies, Inc. Stock
Acquisition and Retention Program or any other benefit plan of the Company, whether
currently existing or adopted in the future) that is contributed to the Plan in
accordance with Section 9.03 and thereby is cancelled by the Company and
is no longer outstanding, an additional share of Common Stock will be added to
the authorized shares to be issued under the Plan; provided that the number of
shares added to the Plan under this sentence shall not exceed 500,000
shares.  No more than 945,000 shares of
Common Stock may be issued under the Plan as Incentive Stock Options.  The number of shares available for issuance
under the Plan shall be further subject to adjustment in accordance with
Section 11.07.  The shares to be
offered under the Plan shall be authorized and unissued Common Stock, or issued
Common Stock which shall have been reacquired by the Company.


 


4.02.                        Shares
Subject to Terminated Awards. 
Common Stock covered by any unexercised portions of terminated Options
(including cancelled Options) granted under Article VI, Common Stock
forfeited as provided in Section 7.02(a), Stock Units forfeited as
provided in Section 9.03, Restricted Shares issued under the Plan that are
cancelled in exchange for Stock Units under Section 9.03(c), and Common
Stock subject to any Awards which are otherwise surrendered by the Participant may
again be subject to new Awards under the Plan. 
Common Stock subject to Options, or portions thereof, which have been
surrendered in connection with the exercise of Stock Appreciation Rights shall
not be available for subsequent Awards under the Plan, but Common Stock issued
in payment of such Stock Appreciation Rights shall not be charged against the
number of shares of Common Stock available for the grant of Awards
hereunder.  In the event of the exercise
of Stock Appreciation Rights not granted in tandem with Options, only the
number of shares of Common Stock actually issued in payment of such Stock


 


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Appreciation Rights shall be charged against the number of shares of
Common Stock available for the grant of Awards hereunder.


 


ARTICLE V


 


PARTICIPATION


 


5.01.                        Eligible
Participants.  Participants in the
Plan shall be such officers and other key employees of the Company and its
Subsidiaries, whether or not members of the Board, as the Committee, in its
sole discretion, may designate from time to time.  The Committee’s designation of a Participant in any year shall
not require the Committee to designate such person to receive Awards or grants
in any other year.  The designation of a
Participant to receive awards or grants under one portion of the Plan does not
require the Committee to include such Participant under other portions of the
Plan.  In order to be eligible to
participate in the deferral arrangements described in Section 9.03, an
individual must be specifically designated by the Committee as a Participant
for purposes of that Section.  The
Committee shall consider such factors as it deems pertinent in selecting
Participants and in determining the type and amount of their respective
Awards.  Notwithstanding any provision
herein to the contrary, the Committee may grant Awards under the Plan, other
than Incentive Stock Options, to non-employees who, in the judgment of the
Committee, render significant services to the Company or any of its
Subsidiaries, on such terms and conditions as the Committee deems appropriate
and consistent with the intent of the Plan. 
Subject to adjustment in accordance with Section 11.07, in any
calendar year, no Participant shall be granted Awards in respect of more than
500,000 shares of Common Stock (whether through grants of Options or Stock
Appreciation Rights or other grants of Common Stock or rights with respect
thereto) and $2,000,000 in cash.


 


ARTICLE VI


 


STOCK OPTIONS AND STOCK APPRECIATION RIGHTS


 


6.01.                        Option
Awards.


 


(a)                                  Grant
of Options.  The Committee may
grant, to such Participants as the Committee may select, Options entitling the
Participant to purchase shares of Common Stock from the Company in such number,
at such price, and on such terms and subject to such conditions, not
inconsistent with the terms of this Plan, as may be established by the
Committee.  The terms of any Option
granted under this Plan shall be set forth in an Award Agreement.


 


(b)                                 Purchase
Price of Options.  The Purchase
Price of each share of Common Stock which may be purchased upon exercise of any
Option granted under the Plan shall be determined by the Committee; provided,
however, that the Purchase Price 


 


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of the Common Stock purchased pursuant to
Options designated by the Committee as Incentive Stock Options shall be equal
to or greater than the Fair Market Value on the Date of Grant as required under
Section 422 of the Code.


 


(c)                                  Designation
of Options.  Except as otherwise
expressly provided in the Plan, the Committee may designate, at the time of the
grant of each Option, the Option as an Incentive Stock Option or a
Non-Qualified Stock Option.


 


(d)                                 Incentive
Stock Option Share Limitation.  No
Participant may be granted Incentive Stock Options under the Plan (or any other
plans of the Company and its Subsidiaries) which would result in shares with an
aggregate Fair Market Value (measured on the Date of Grant) of more than
$100,000 first becoming exercisable in any one calendar year.


 


(e)                                  Rights
As a Stockholder.  A Participant or
a transferee of an Option pursuant to Section 11.04 shall have no rights
as a stockholder with respect to Common Stock covered by an Option until the
Participant or transferee shall have become the holder of record of any such shares,
and no adjustment shall be made for dividends in cash or other property or
distributions or other rights with respect to any such Common Stock for which
the record date is prior to the date on which the Participant or a transferee
of the Option shall have become the holder of record of any such shares covered
by the Option; provided, however, that Participants are entitled to share
adjustments to reflect capital changes under Section 11.07.


 


(f)                                    Restoration
Options Upon the Exercise of a Non-Qualified Stock Option. In the event
that any Participant delivers to the Company, or has withheld from the shares
otherwise issuable upon the exercise of a Non-Qualified Stock Option, shares of
Common Stock in payment of the Purchase Price of any Non-Qualified Stock Option
granted hereunder in accordance with Section 6.04, the Committee shall
have the authority to grant or provide for the automatic grant of a Restoration
Option to such Participant.  The grant
of a Restoration Option shall be subject to the satisfaction of such conditions
or criteria as the Committee in its sole discretion shall establish from time
to time.  A Restoration Option shall
entitle the holder thereof to purchase a number of shares of Common Stock equal
to the number of such shares so delivered or withheld upon exercise of the
original Option and, in the discretion of the Committee, the number of shares,
if any, delivered or withheld to the Corporation to satisfy any withholding tax
liability arising in connection with the exercise of the original Option.  A Restoration Option shall have a per share
Purchase Price of not less than 100% of the per share Fair Market Value of the
Common Stock on the date of grant of such Restoration Option, a term not longer
than the remaining term of the original Option at the time of exercise thereof,
and such other terms and conditions as the Committee in its sole discretion
shall determine.


 


(g)                                 Deferral
of Stock Option Gains.  Stock Option
Gains with respect to Non-Qualified Stock Options granted under this Plan may
be deferred in accordance


 


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with Section 9.03 by any Participant who is designated by the
Committee as eligible to participate in such deferral arrangement.


 


6.02.                        Stock
Appreciation Rights.


 


(a)                                  Stock
Appreciation Right Awards.  The
Committee is authorized to grant to any Participant one or more Stock
Appreciation Rights.  Such Stock
Appreciation Rights may be granted either independent of or in tandem with
Options granted to the same Participant. Stock Appreciation Rights granted in
tandem with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such Participant of
the related Option; provided however, that: (i) any Option covering any share
of Common Stock shall expire and not be exercisable upon the exercise of any
Stock Appreciation Right with respect to the same share, (ii) any Stock
Appreciation Right covering any share of Common Stock shall expire and not be
exercisable upon the exercise of any related Option with respect to the same
share, and (iii) an Option and Stock Appreciation Right covering the same share
of Common Stock may not be exercised simultaneously.  Upon exercise of a Stock Appreciation Right with respect to a
share of Common Stock, the Participant shall be entitled to receive an amount
equal to the excess, if any, of (A) the Fair Market Value of a share of Common
Stock on the date of exercise over (B) the Exercise Price of such Stock
Appreciation Right established in the Award Agreement, which amount shall be
payable as provided in Section 6.02(c).


 


(b)                                 Exercise
Price. The Exercise Price established under any Stock Appreciation Right
granted under this Plan shall be determined by the Committee, but in the case
of Stock Appreciation Rights granted in tandem with Options shall not be less
than the Purchase Price of the related Option. 
Upon exercise of Stock Appreciation Rights granted in tandem with
options, the number of shares subject to exercise under any related Option
shall automatically be reduced by the number of shares of Common Stock
represented by the Option or portion thereof which are surrendered as a result
of the exercise of such Stock Appreciation Rights.


 


(c)                                  Payment
of Incremental Value.  Any payment
which may become due from the Company by reason of a Participant’s exercise of
a Stock Appreciation Right may be paid to the Participant as determined by the
Committee (i) all in cash, (ii) all in Common Stock, or (iii) in any
combination of cash and Common Stock. 
In the event that all or a portion of the payment is made in Common
Stock, the number of shares of Common Stock delivered in satisfaction of such
payment shall be determined by dividing the amount of such payment or portion
thereof by the Fair Market Value on the Exercise Date.  No fractional share of Common Stock shall be
issued to make any payment in respect of Stock Appreciation Rights; if any
fractional share would be issuable, the combination of cash and Common Stock
payable to the Participant shall be adjusted as directed by the Committee to
avoid the issuance of any fractional share.


 


(d)                                 Deferral
of Certain Stock Appreciation Rights. 
In the case of Stock Appreciation Rights that are payable solely in
shares of Common Stock, the shares


 


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of Common Stock issuable upon the exercise thereof may be deferred in
accordance with Section 9.03 by any Participant who is designated by the
Committee as eligible to participate in such deferral arrangement.


 


6.03.                        Terms
of Stock Options and Stock Appreciation Rights.


 


(a)                                  Conditions on Exercise.  An
Award Agreement with respect to Options and/or Stock Appreciation Rights may
contain such waiting periods, exercise dates and restrictions on exercise (including,
but not limited to, periodic installments) as may be determined by the
Committee at the time of grant.


 


(b)                                 Duration
of Options and Stock Appreciation Rights. 
Options and Stock Appreciation Rights shall terminate upon the first to
occur of the following events:


 


(i)                                     Expiration of the Option or
Stock Appreciation Right as provided in the Award Agreement; or


 


(ii)                                  Termination of the Award in the
event of a Participant’s disability, Retirement, death or other Termination of
Employment as provided in the Award Agreement; or


 


(iii)                               In the case of an Incentive
Stock Option, ten years from the Date of Grant; or


 


(iv)                              Solely in the case of a Stock
Appreciation Right granted in tandem with an Option, upon the expiration of the
related Option.


 


(c)                                  Acceleration
or Extension of Exercise Time.  The
Committee, in its sole discretion, shall have the right (but shall not be
obligated), exercisable on or at any time after the Date of Grant, to permit
the exercise of an Option or Stock Appreciation Right (i) prior to the time
such Option or Stock Appreciation Right would become exercisable under the
terms of the Award Agreement, (ii) after the termination of the Option or Stock
Appreciation Right under the terms of the Award Agreement, or (iii) after the
expiration of the Option or Stock Appreciation Right.


 


6.04.                        Exercise
Procedures.  Each Option and Stock
Appreciation Right granted under the Plan shall be exercised by accessing a
telephonic voice/data response system or internet web site maintained or
otherwise approved by the Company or its designated agent prior to the close of
business on the expiration date of the Option or Stock Appreciation Right (or
by such other method as provided in the Award Agreement or as the Committee may
establish or approve from time to time). 
The Purchase Price of shares purchased upon exercise of an Option
granted under the Plan shall be paid in full by means of a cashless exercise
program under which, if so instructed by the Participant, shares may be issued
directly to the Participant’s broker or dealer upon the Participant’s
irrevocable election.  Alternatively,
the Participant may pay the purchase price by cash or any other method approved
in advance by the Committee.  In the
event that any Common


 


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Stock shall be transferred to the Company to satisfy all or any part of
the Purchase Price, the part of the Purchase Price deemed to have been
satisfied by such transfer of Common Stock shall be equal to the product
derived by multiplying the Fair Market Value as of the date of exercise times
the number of shares of Common Stock transferred to the Company.  The Participant may not transfer to the
Company in satisfaction of the Purchase Price any fractional share of Common
Stock.  Any part of the Purchase Price
paid in cash upon the exercise of any Option shall be added to the general
funds of the Company and may be used for any proper corporate purpose.  Unless the Committee shall otherwise determine,
any Common Stock transferred to the Company as payment of all or part of the
Purchase Price upon the exercise of any Option shall be held as treasury
shares.


 


6.05.                        Change
in Control.  Unless otherwise
provided by the Committee in the applicable Award Agreement, in the event of a
Change in Control, all Options outstanding on the date of such Change in
Control, and all Stock Appreciation Rights shall become immediately and fully
exercisable.  The provisions of this
Section 6.05 shall not be applicable to any Options or Stock Appreciation
Rights granted to a Participant if any Change in Control results from such
Participant’s beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of Common Stock or Company Voting Securities.


 


ARTICLE VII


 


RESTRICTED SHARES


 


7.01.                        Restricted
Share Awards.  The Committee may
grant to any Participant an Award of Common Stock in such number of shares, and
on such terms, conditions and restrictions, whether based on performance
standards, periods of service, retention by the Participant of ownership of
purchased or designated shares of Common Stock or other criteria, as the
Committee shall establish.  With respect
to performance-based Awards of Restricted Shares to “covered employees” (as
defined in Section 162(m) of the Code), performance targets will be
limited to specified levels of one or more of the Performance Goals.  The terms of any Restricted Share Award
granted under this Plan shall be set forth in an Award Agreement which shall
contain provisions determined by the Committee and not inconsistent with this
Plan.


 


(a)                                  Issuance
of Restricted Shares.  As soon as
practicable after the Date of Grant of a Restricted Share Award by the
Committee, the Company shall cause to be transferred on the books of the
Company, or its agent, Common Stock, registered on behalf of the Participant,
evidencing the Restricted Shares covered by the Award, but subject to
forfeiture to the Company as of the Date of Grant if an Award Agreement with
respect to the Restricted Shares covered by the Award is not duly executed by
the Participant and timely returned to the Company.  All Common Stock covered by Awards under this Article VII
shall be subject to the restrictions, terms and conditions contained in the
Plan and the Award Agreement entered into by the Participant.  Until the lapse or 


 


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release of all restrictions applicable to an Award of Restricted
Shares, the share certificates representing such Restricted Shares may be held
in custody by the Company, its designee, or, if the certificates bear a
restrictive legend, by the Participant. 
Upon the lapse or release of all restrictions with respect to an Award
as described in Section 7.01(d), one or more share certificates,
registered in the name of the Participant, for an appropriate number of shares
as provided in Section 7.01(d), free of any restrictions set forth in the
Plan and the Award Agreement shall be delivered to the Participant.


 


(b)                                 Stockholder
Rights.  Beginning on the Date of
Grant of the Restricted Share Award and subject to execution of the Award
Agreement as provided in Section 7.01(a), the Participant shall become a
stockholder of the Company with respect to all shares subject to the Award
Agreement and shall have all of the rights of a shareholder, including, but not
limited to, the right to vote such shares and the right to receive dividends;
provided, however, that any Common Stock distributed as a dividend or otherwise
with respect to any Restricted Shares as to which the restrictions have not yet
lapsed, shall be subject to the same restrictions as such Restricted Shares and
held or restricted as provided in Section 7.01(a).


 


(c)                                  Restriction
on Transferability.  None of the
Restricted Shares may be assigned or transferred (other than by will or the
laws of descent and distribution, or to an inter vivos trust with respect to
which the Participant is treated as the owner under Sections 671 through 677 of
the Code, except to the extent that Section 16 of the Exchange Act limits
a participant’s right to make such transfers), pledged or sold prior to lapse
of the restrictions applicable thereto.


 


(d)                                 Delivery
of Shares Upon Vesting.  Upon
expiration or earlier termination of the forfeiture period without a forfeiture
and the satisfaction of or release from any other conditions prescribed by the
Committee, or at such earlier time as provided under the provisions of
Section 7.03, the restrictions applicable to the Restricted Shares shall
lapse.  As promptly as administratively
feasible thereafter, subject to the requirements of Section 11.05, the
Company shall deliver to the Participant or, in case of the Participant’s
death, to the Participant’s Beneficiary, one or more share certificates for the
appropriate number of shares of Common Stock, free of all such restrictions,
except for any restrictions that may be imposed by law.


 


7.02.                        Terms
of Restricted Shares.


 


(a)                                  Forfeiture
of Restricted Shares.  Subject to
Sections 7.02(b) and 7.03, all Restricted Shares shall be forfeited and
returned to the Company and all rights of the Participant with respect to such
Restricted Shares shall terminate unless the Participant continues in the
service of the Company or a Subsidiary as an employee until the expiration of
the forfeiture period for such Restricted Shares and satisfies any and all
other conditions set forth in the Award Agreement.  The Committee shall determine the forfeiture period (which may,
but need not, lapse in installments) and any other terms and conditions applicable
with respect to any Restricted Share Award.


 


12

















 


(b)                                 Waiver
of Forfeiture Period. 
Notwithstanding anything contained in this Article VII to the
contrary, the Committee may, in its sole discretion, waive the forfeiture
period and any other conditions set forth in any Award Agreement under
appropriate circumstances (including the death, disability or Retirement of the
Participant or a material change in circumstances arising after the date of an
Award) and subject to such terms and conditions (including forfeiture of a
proportionate number of the Restricted Shares) as the Committee shall deem
appropriate.


 


(c)                                  Deferral
of Restricted Shares.  Restricted
Shares granted under this Plan may be deferred in accordance with
Section 9.03 by any Participant who is designated by the Committee as
eligible to participate in such deferral arrangement.


 


7.03.                        Change
in Control.  Unless otherwise
provided by the Committee in the applicable Award Agreement, in the event of a
Change in Control, all restrictions applicable to the Restricted Share Award
shall terminate fully and the Participant shall immediately have the right to
the delivery of share certificate or certificates for such shares in accordance
with Section 7.01(d).


 


ARTICLE VIII


 


PERFORMANCE AWARDS


 


8.01.                        Performance
Awards.


 


(a)                                  Award
Periods and Calculations of Potential Incentive Amounts. The Committee may
grant Performance Awards to Participants. A Performance Award shall consist of
the right to receive a payment (measured by the Fair Market Value of a
specified number of shares of Common Stock, increases in such Fair Market Value
during the Award Period and/or a fixed cash amount) contingent upon the extent
to which certain predetermined performance targets have been met during an
Award Period. Performance Awards may be made in conjunction with, or in
addition to, Restricted Share Awards made under Article VII.  The Award Period shall be two or more fiscal
or calendar years as determined by the Committee.  The Committee, in its discretion and under such terms as it deems
appropriate, may permit newly eligible employees, such as those who are
promoted or newly hired, to receive Performance Awards after an Award Period
has commenced.


 


(b)                                 Performance
Targets.  The performance targets
may include such goals related to the performance of the Company or, where
relevant, any one or more of its Subsidiaries or divisions and/or the
performance of a Participant as may be established by the Committee in its
discretion.  In the case of Performance
Awards to “covered employees” (as defined in Section 162(m) of the Code),
the targets will be limited to specified levels of one or more of the
Performance Goals.  The performance
targets established by the Committee may vary for different Award Periods and
need not be the same for each Participant receiving a Performance Award in an
Award Period.  Except to


 


13

















 


the extent inconsistent with the performance-based compensation
exception under Section 162(m) of the Code, in the case of Performance
Awards granted to employees to whom such section is applicable, the
Committee, in its discretion, but only under extraordinary circumstances as
determined by the Committee, may change any prior determination of performance targets
for any Award Period at any time prior to the final determination of the Award
when events or transactions occur to cause the performance targets to be an
inappropriate measure of achievement.


 


(c)                                  Earning
Performance Awards.  The Committee,
at or as soon as practicable after the Date of Grant, shall prescribe a formula
to determine the percentage of the Performance Award to be earned based upon
the degree of attainment of performance targets.


 


(d)                                 Payment
of Earned Performance Awards. 
Subject to the requirements of Section 11.05, payments of earned
Performance Awards shall be made in cash or Common Stock, or a combination of
cash and Common Stock, in the discretion of the Committee.  The Committee, in its sole discretion, may
define such terms and conditions with respect to the payment of earned
Performance Awards as it may deem desirable.


 


8.02.                        Terms
of Performance Awards.


 


(a)                                  Termination
of Employment.  Unless otherwise
provided below or in Section 8.03, in the case of a Participant’s
Termination of Employment prior to the end of an Award Period, the Participant
will not have earned any Performance Awards.


 


(b)                                 Retirement.
If a Participant’s Termination of Employment is because of Retirement prior to
the end of an Award Period, the Participant will not be paid any Performance
Awards, unless the Committee, in its sole and exclusive discretion, determines
that an Award should be paid. In such a case, the Participant shall be entitled
to receive a pro-rata portion of his or her Award as determined under Subsection (d).


 


(c)                                  Death
or Disability.  If a Participant’s
Termination of Employment is due to death or disability (as determined in the
sole and exclusive discretion of the Committee) prior to the end of an Award
Period, the Participant or the Participant’s personal representative shall be
entitled to receive a pro-rata share of his or her Award as determined under
Subsection (d).


 


(d)                                 Pro-Rata
Payment.  The amount of any payment
made to a Participant whose employment is terminated by Retirement, death or disability
(under circumstances described in Subsections (b) and (c)) will be the amount
determined by multiplying the amount of the Performance Award which would have
been earned, determined at the end of the Award Period, had such employment not
been terminated, by a fraction, the numerator of which is the number of whole
months such Participant was employed during the Award Period, and the
denominator of which is the total number of months of the Award Period.  Any such payment made to a Participant whose


 


14

















 


employment is terminated prior to the end of an Award Period under this
Section 8.02 shall be made at the end of the respective Award Period,
unless otherwise determined by the Committee in its sole discretion.  Any partial payment previously made or
credited to a deferred account for the benefit of a Participant as provided
under Section 8.01(d) of the Plan shall be subtracted from the amount
otherwise determined as payable as provided in this Section.


 


(e)                                  Other
Events.  Notwithstanding anything to
the contrary in this Article VIII, the Committee may, in its sole and
exclusive discretion, determine to pay all or any portion of a Performance
Award to a Participant who has terminated employment prior to the end of an
Award Period under certain circumstances (including the death, disability or
retirement of the Participant or a material change in circumstances arising
after the Date of Grant) and subject to such terms and conditions as the
Committee shall deem appropriate.


 


8.03.                        Change
in Control.  Unless otherwise
provided by the Committee in the applicable Award Agreement, in the event of a
Change in Control, all Performance Awards for all Award Periods shall
immediately become fully payable to all Participants and shall be paid to
Participants in accordance with Section 8.02(d), within 30 days after such
Change in Control.


 


ARTICLE IX


 


OTHER STOCK-BASED AWARDS


 


9.01.                        Grant
of Other Stock-Based Awards.  Other
stock-based awards, consisting of stock purchase rights (with or without loans
to Participants by the Company containing such terms as the Committee shall
determine), Awards of cash, Awards of Common Stock, or Awards valued in whole
or in part by reference to, or otherwise based on, Common Stock, may be granted
either alone or in addition to or in conjunction with other Awards under the
Plan. Subject to the provisions of the Plan, the Committee shall have sole and
complete authority to determine the persons to whom and the time or times at
which such Awards shall be made, the number of shares of Common Stock to be
granted pursuant to such Awards, and all other conditions of the Awards.  Any such Award shall be confirmed by an
Award Agreement executed by the Committee and the Participant, which Award Agreement
shall contain such provisions as the Committee determines to be necessary or
appropriate to carry out the intent of this Plan with respect to such Award.


 


9.02.                        Terms
of Other Stock-Based Awards.  In
addition to the terms and conditions specified in the Award Agreement, Awards
made pursuant to this Article IX shall be subject to the following:


 


(a)                                  Any Common Stock subject to
Awards made under this Article IX may not be sold, assigned, transferred,
pledged or otherwise encumbered prior to the date


 


15

















 


on which the shares
are issued, or, if later, the date on which any applicable restriction,
performance or deferral period lapses; and


 


(b)                                 If specified by the Committee in
the Award Agreement, the recipient of an Award under this Article IX shall
be entitled to receive, currently or on a deferred basis, interest or dividends
or dividend equivalents with respect to the Common Stock or other securities
covered by the Award; and


 


(c)                                  The Award Agreement with respect
to any Award shall contain provisions dealing with the disposition of such
Award in the event of a Termination of Employment prior to the exercise,
realization or payment of such Award, whether such termination occurs because
of Retirement, disability, death or other reason, with such provisions to take
account of the specific nature and purpose of the Award.


 


9.03                           Stock
Unit Awards.


 


(a)                                  In
General.  Without limiting the
generality of the foregoing provisions of this Article IX, and subject to
such terms, limitations and restrictions as the Committee may impose,
Participants designated by the Committee as Participants for purposes of this
Section 9.03 may receive Awards of Stock Units in connection with: (i) the
deferral of Stock Option Gains, (ii) the deferral of restricted stock (whether
granted under this Plan or any other plan sponsored by the Company) and (iii)
in connection with the deferral of other types of compensation, including
without limitation, stock appreciation rights, phantom stock awards and other
types of compensation awards that are payable solely in shares of Common Stock
(whether granted under this Plan or any other plan sponsored by the
Company).  The Committee shall establish
rules and regulations governing the deferrals and the Stock Unit Awards under
any such arrangement as may be established.


 


(b)                                 Deferral
of Stock Option Gains.  Subject to
such timing rules as the Committee may establish, a Participant may irrevocably
elect to defer receipt of all or any portion of Stock Option Gains and receive
a credit under his or her Stock Unit Account of an equivalent number of Stock
Units in accordance with such limitations, terms and conditions as the
Committee may determine.  Any such
deferral election must occur in a time period designated by the Committee from
time to time, but such election must occur prior to the exercise of such stock
option and within such time frame as determined by the Committee in its
discretion so that such election could qualify for income tax deferral in accordance
with then applicable federal tax law. 
Nothing in this Section 9.03(b) of the Plan shall be interpreted to
permit a Participant to exercise any stock option to the extent such stock
option is not vested or is not otherwise exercisable in accordance with the
applicable plan and agreement.  A
Participant’s election to defer Stock Option Gains shall only apply to Option
exercises in connection with which the Participant, in accordance with the
applicable plan and agreement, pays the total amount of the exercise price of
such stock option by the delivery (or deemed delivery) of shares of Common
Stock held by the Participant for at least the period of time required by the
applicable plan and agreement, but in any event, held with no restrictions prior
to


 


16

















 


delivery and for such time frame as determined by the Committee in its
discretion so that such election could qualify for income tax deferral in
accordance with then applicable federal tax law; provided, however, that
subject to such terms, conditions and restrictions as the Committee may
determine, Participants may be permitted, in the Committee’s discretion, to
defer into this Plan gains attributable to stock options exercised by means
other than the payment of the exercise price by the delivery (or deemed
delivery) of shares of Common Stock.


 


(c)                                  Deferral
of Restricted Stock.  Subject to
such timing rules as the Committee may establish, a Participant may irrevocably
elect to defer receipt of all or any number of shares of restricted stock
(whether granted under this Plan or any other plan sponsored by the Company)
and receive a credit under his or her Stock Unit Account of an equivalent
number of Stock Units.  Any such
deferral election must be made in a time period designated by the Committee
from time to time, but such election must occur before the restrictions on the
restricted stock lapse and within such time frame as determined by the
Committee in its discretion so that such election could qualify for income tax
deferral in accordance with then applicable federal tax law.  If a Participant elects to defer all or a
portion of a restricted stock award that has previously been granted, the
Participant shall transfer the restricted stock subject to such restricted
stock award to the Company.  Upon such
transfer, the restricted stock shall be cancelled by the Company and no longer
outstanding, except as treasury stock. 
The Stock Units credited to a Participant’s Stock Unit Account with
respect to a deferral of shares of restricted stock shall vest and shall be
forfeited subject to the same terms and conditions as were applicable to the
original restricted stock.  The number
of Stock Units credited to a Participant’s Stock Unit Account shall be reduced by
the number of Stock Units so forfeited.


 


(d)                                 Other
Deferrals.  A Participant may
irrevocably elect to defer receipt of all or any number of shares of Common
Stock issuable upon the exercise of any stock appreciation rights, phantom
stock awards or other types of compensation awards that are payable solely in
shares of Common Stock (whether granted under this Plan or any other plan
sponsored by the Company) and receive a credit under his or her Stock Unit
Account of an equivalent number of Stock Units.  Any such deferral election must be made in the time period
designated by the Committee from time to time.


 


(e)                                  Dividend
Equivalents.  A Participant’s Stock
Unit Account shall be credited with a number of Stock Units equal in value to
the amount of any cash dividends or stock distributions that would be payable
with respect to such Stock Units had such Stock Units been outstanding shares
of Common Stock (“dividend equivalents”). 
The number of Stock Units credited with respect to cash dividends shall
be determined by dividing the amount of cash dividends that would be payable by
the Fair Market Value of Common Stock as of the date such cash dividends would
be payable.  Dividend equivalents
credited to a Participant’s Stock Unit Account that are attributable to Stock
Units that are subject to vesting and forfeiture restrictions as a result of a
deferral of receipt of restricted stock shall be forfeited at such time as any
such underlying Stock Units are forfeited.


 


17

















 


(f)                                    Vesting
of Stock Units.  A Participant shall
be vested in the Stock Units credited to such Participant’s Stock Unit Account
that are attributable to Stock Option Gains, deferred shares of restricted
stock, deferred stock appreciation rights, phantom stock awards and other types
of compensation that are payable solely in Common Stock, and the dividend
equivalents credited with respect to each type of award, in accordance with the
same terms and conditions contained in the applicable award agreement and plan
under which such stock option, restricted stock, stock appreciation right,
phantom stock or other type of compensation award was originally granted.  Stock Units that are not vested on the date
of a Participant’s Termination of Employment shall be forfeited.


 


(g)                                 Distribution
of Stock Units.  The vested Stock
Units in a Participant’s Stock Unit Account shall only be distributed, or
commence to be distributed, solely in the form of Common Stock to the
Participant, only upon such participant’s Termination of Employment, in a lump
sum payment or in periodic payments over time as the Participant may elect in
accordance with procedures established by the Committee; provided, however,
that the Committee may establish procedures pursuant to which a Participant may
elect to defer the commencement of distribution to a date later than the
Participant’s Termination of Employment. 
Notwithstanding any other provision of this Section 9.03 or of the
Plan, the balance credited to a Participant’s Stock Unit Account (whether or
not it is then otherwise in pay status, but only to the extent it is otherwise
vested (whether over time or by acceleration) under the terms of the agreements
originally granting the stock) shall be distributed in a lump sum, immediately
prior to and conditioned upon, the consummation of any transaction constituting
a Change in Control.  A Participant
shall be entitled to receive a distribution of one share of Common Stock for
each Stock Unit credited to his or her Stock Unit Account and cash equal to the
Fair Market Value of any fractional Stock Unit credited to his or her Stock
Unit Account.


 


(h)                                 Unsecured
General Creditor.  With respect to
all Stock Units and Awards under Section 9.03 of the Plan, Participants
and their beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, claims or interest in any specific property or assets of the
Company.  The Company’s obligation under
Section 9.03 of the Plan shall be merely that of an unfunded and unsecured
promise of the Company to pay shares of Common Stock in the future, and the
rights of the Participants and beneficiaries with respect thereto shall be no
greater than those of unsecured general creditors.  However, the Committee may, in its discretion, establish one or more
vehicles for payment of its obligations under Section 9.03 of the Plan,
including a trust, know as a “rabbi trust,” for use in funding the benefits
under Section 9.03 of the Plan with a trustee to be selected by the
Committee in accordance with a trust agreement meeting the requirements of Rev.
Proc. 92-64, as it may be amended or supplemented in the future.  The Awards and benefits under
Section 9.03 of the Plan are intended to be unfunded for tax purposes under
the Code and for purposes of the Employee Retirement Income Security Act of
1974, as amended.


 


9.04.                        Foreign
Qualified Awards.  Awards under the
Plan may be granted to such employees of the Company and its Subsidiaries who
are residing in foreign jurisdictions


 


18

















 


as the Committee in its sole discretion may determine from time to
time. The Committee may adopt such supplements to the Plan as may be necessary
or appropriate to comply with the applicable laws of such foreign jurisdictions
and to afford Participants favorable treatment under such laws; provided,
however, that no Award shall be granted under any such supplement with terms or
conditions inconsistent with the provision set forth in the Plan.


 


ARTICLE X


 


SHORT-TERM CASH INCENTIVE AWARDS


 


10.01.                  Eligibility.  Executive officers of the Company who are
from time to time determined by the Committee to be “covered employees” for
purposes of Section 162(m) of the Code will be eligible to receive
short-term cash incentive awards under this Article X.


 


10.02.                  Awards.


 


(a)                                  Performance
Targets.  For each fiscal year of
the Company after fiscal year 1999, the Committee shall establish objective
performance targets based on specified levels of one or more of the Performance
Goals.  Such performance targets shall
be established by the Committee on a timely basis to ensure that the targets
are considered “preestablished” for purposes of Section 162(m) of the
Code.


 


(b)                                 Amounts
of Awards.  In conjunction with the
establishment of performance targets for a fiscal year, the Committee shall
adopt an objective formula (on the basis of percentages of Participants’
salaries, shares in a bonus pool or otherwise) for computing the respective
amounts payable under the Plan to Participants if and to the extent that the
performance targets are attained.  Such
formula shall comply with the requirements applicable to performance-based
compensation plans under Section 162(m) of the Code and, to the extent
based on percentages of a bonus pool, such percentages shall not exceed 100% in
the aggregate.


 


(c)                                  Payment
of Awards.  Awards will be payable
to Participants in cash each year upon prior written certification by the
Committee of attainment of the specified performance targets for the preceding
fiscal year.


 


(d)                                 Negative
Discretion.  Notwithstanding the
attainment by the Company of the specified performance targets, the Committee
shall have the discretion, which need not be exercised uniformly among the
Participants, to reduce or eliminate the award that would be otherwise paid.


 


(e)                                  Guidelines.  The Committee shall adopt from time to time
written policies for its implementation of this Article X. Such guidelines
shall reflect the


 


19

















 


intention of the Company that all payments hereunder qualify as
performance-based compensation under Section 162(m) of the Code.


 


(f)                                    Non-Exclusive Arrangement.  The
adoption and operation of this Article X shall not preclude the Board or
the Committee from approving other short-term incentive compensation
arrangements for the benefit of individuals who are Participants hereunder as
the Board or Committee, as the case may be, deems appropriate and in the best
of the Company.


 


ARTICLE XI


 


TERMS APPLICABLE GENERALLY TO AWARDS


GRANTED UNDER THE PLAN


 


11.01.                  Plan
Provisions Control Award Terms. 
Except as provided in Section 11.16, the terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan which is contrary to any of
the provisions of the Plan.  In the
event any provision of any Award granted under the Plan shall conflict with any
term in the Plan as constituted on the Date of Grant of such Award, the term in
the Plan as constituted on the Date of Grant of such Award shall control.  Except as provided in Section 11.03 and
Section 11.07, the terms of any Award granted under the Plan may not be
changed after the Date of Grant of such Award so as to materially decrease the
value of the Award without the express written approval of the holder.


 


11.02.                  Award
Agreement.  No person shall have any
rights under any Award granted under the Plan unless and until the Company and
the Participant to whom such Award shall have been granted shall have executed
and delivered an Award Agreement or received any other Award acknowledgment
authorized by the Committee expressly granting the Award to such person and
containing provisions setting forth the terms of the Award.


 


11.03.                  Modification
of Award After Grant.  No Award
granted under the Plan to a Participant may be modified (unless such
modification does not materially decrease the value of the Award) after the
Date of Grant except by express written agreement between the Company and the
Participant, provided that any such change (a) shall not be inconsistent with
the terms of the Plan, and (b) shall be approved by the Committee.


 


11.04.                  Limitation
on Transfer.  Except as provided in
Section 7.01(c) in the case of Restricted Shares, a Participant’s rights
and interest under the Plan may not be assigned or transferred other than by
will or the laws of descent and distribution, and during the lifetime of a
Participant, only the Participant personally (or the Participant’s personal
representative) may exercise rights under the Plan.  The Participant’s Beneficiary may exercise the Participant’s
rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, to the extent


 


20

















 


permitted under Section 16(b) of the Exchange Act with respect to
Participants subject to such Section, the Committee may grant Non-Qualified
Stock Options that are transferable, without payment of consideration, to
immediate family members of the Participant or to trusts or partnerships for
such family members, and the Committee may also amend outstanding Non-Qualified
Stock Options to provide for such transferability.


 


11.05.                  Taxes.  The Company shall be entitled, if the
Committee deems it necessary or desirable, to withhold (or secure payment from
the Participant in lieu of withholding) the amount of any withholding or other
tax required by law to be withheld or paid by the Company with respect to any
amount payable and/or shares issuable under such Participant’s Award, or with
respect to any income recognized upon a disqualifying disposition of shares
received pursuant to the exercise of an Incentive Stock Option, and the Company
may defer payment or issuance of the cash or shares upon exercise or vesting of
an Award unless indemnified to its satisfaction against any liability for any
such tax. The amount of such withholding or tax payment shall be determined by
the Committee and shall be payable by the Participant at such time as the
Committee determines in accordance with the following rules:


 


(a)                                  The Participant shall have the
right to elect to meet his or her withholding requirement (i) by having
withheld from such Award at the appropriate time that number of shares of
Common Stock, rounded up to the next whole share, whose Fair Market Value is
equal to the amount of withholding taxes due, (ii) by direct payment to the
Company in cash of the amount of any taxes required to be withheld with respect
to such Award or (iii) by a combination of shares and cash.


 


(b)                                 The Committee shall have the
discretion as to any Award, to cause the Company to pay to tax authorities for
the benefit of any Participant, or to reimburse such Participant for the
individual taxes which are due on the grant, exercise or vesting of any share
Award, or the lapse of any restriction on any share Award (whether by reason of
a Participant’s filing of an election under Section 83(b) of the Code or
otherwise), including, but not limited to, Federal income tax, state income
tax, local income tax and excise tax under Section 4999 of the Code, as
well as for any such taxes as may be imposed upon such tax payment or
reimbursement.


 


(c)                                  In
the case of Participants who are subject to Section 16 of the Exchange
Act, the Committee may impose such limitations and restrictions as it deems
necessary or appropriate with respect to the delivery or withholding of shares
of Common Stock to meet tax withholding obligations.


 


11.06.                  Surrender
of Awards.  Any Award granted under
the Plan may be surrendered to the Company for cancellation on such terms as
the Committee and the holder approve. 
With the consent of the Participant, the Committee may substitute a new
Award under this Plan in connection with the surrender by the Participant of an
equity compensation award previously granted under this Plan or any other plan
sponsored by the Company; provided, however, that no such substitution or any
other change shall be


 


21

















 


permitted if it would constitute a “repricing” under the rules of the
New York Stock Exchange.


 


11.07.                  Adjustments
to Reflect Capital Changes.


 


(a)                                  Recapitalization.
The number and kind of shares subject to outstanding Awards, the Purchase Price
or Exercise Price for such shares, the number and kind of shares available for
Awards subsequently granted under the Plan and the maximum number of shares in
respect of which Awards can be made to any Participant in any calendar year
shall be appropriately adjusted to reflect any stock dividend, stock split,
combination or exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan or the Awards
granted under the Plan.  The maximum
number of shares in respect of which Awards can be made to any Participant in
any calendar year shall be proportionately adjusted to reflect any other event
that results in an increase in the number of issued and outstanding shares of
Common Stock.  The Committee shall have the
power and sole discretion to determine the amount of the adjustment to be made
in each case.


 


(b)                                 Merger.  After any Merger in which the Company is the
surviving corporation, each Participant shall, at no additional cost, be
entitled upon any exercise of all Options or receipt of other Award to receive
(subject to any required action by shareholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Award, the
number and class of shares or other securities to which such Participant would
have been entitled pursuant to the terms of the Merger if, at the time of the
Merger, such Participant had been the holder of record of a number of shares
equal to the number of shares receivable or exercisable pursuant to such
Award.  Comparable rights shall accrue
to each Participant in the event of successive Mergers of the character
described above.  In the event of a
Merger in which the Company is not the surviving corporation, the surviving,
continuing, successor, or purchasing corporation, as the case may be (the “Acquiring
Corporation”), shall either assume the Company’s rights and obligations under
outstanding Award Agreements or substitute awards in respect of the Acquiring
Corporation’s stock for such outstanding Awards.  In the event the Acquiring Corporation fails to assume or
substitute for such outstanding Awards, the Board shall provide that any
unexercisable and/or unvested portion of the outstanding Awards shall be
immediately exercisable and vested as of a date prior to such Merger, as the
Board so determines.  The exercise
and/or vesting of any Award that was permissible solely by reason of this
Section 11.07(b) shall be conditioned upon the consummation of the
Merger.  Any Options which are neither
assumed by the Acquiring Corporation nor exercised as of the date of the Merger
shall terminate effective as of the effective date of the Merger.


 


(c)                                  Options
to Purchase Shares or Stock of Acquired Companies.  After any Merger in which the Company or a
Subsidiary shall be a surviving corporation, the Committee may grant
substituted options under the provisions of the Plan, pursuant to
Section 424 of the Code, replacing old options granted under a plan of
another party to the Merger whose shares or stock subject to the old options
may no longer be issued


 


22

















 


following the Merger.  The
foregoing adjustments and manner of application of the foregoing provisions
shall be determined by the Committee in its sole discretion.  Any such adjustments may provide for the elimination
of any fractional shares which might otherwise become subject to any Options.


 


11.08.                  No
Right to Employment.  No employee or
other person shall have any claim of right to be granted an Award under this
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the Company or
any of its Subsidiaries.


 


11.09.                  Awards
Not Includable for Benefit Purposes. 
Payments received by a Participant pursuant to the provisions of the
Plan shall not be included in the determination of benefits under any pension,
group insurance or other benefit plan applicable to the Participant which is
maintained by the Company or any of its Subsidiaries, except as may be provided
under the terms of such plans or determined by the Board.


 


11.10.                  Governing
Law.  All determinations made and
actions taken pursuant to the Plan shall be governed by the laws of the State
of Delaware and construed in accordance therewith.


 


11.11.                  No
Strict Construction.  No rule of
strict construction shall be implied against the Company, the Committee, or any
other person in the interpretation of any of the terms of the Plan, any Award
granted under the Plan or any rule or procedure established by the Committee.


 


11.12.                  Compliance
with Rule 16b-3.  It is intended
that, unless the Committee determines otherwise, Awards under the Plan be
eligible for exemption under Rule 16b-3. 
The Board is authorized to amend the Plan and to make any such
modifications to Award Agreements to comply with Rule 16b-3, as it may be
amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments made to Rule 16b-3.


 


11.13.                  Captions.  The captions (i.e., all
Section headings) used in the Plan are for convenience only, do not
constitute a part of the Plan, and shall not be deemed to limit, characterize
or affect in any way any provisions of the Plan, and all provisions of the Plan
shall be construed as if no captions have been used in the Plan.


 


11.14.                  Severability.  Whenever possible, each provision in the
Plan and every Award at any time granted under the Plan shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of the Plan or any Award at any time granted under the Plan shall be
held to be prohibited by or invalid under applicable law, then (a) such
provision shall be deemed amended to accomplish the objectives of the provision
as originally written to the fullest extent permitted by law and


 


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(b) all other provisions of the Plan and every other Award at any time
granted under the Plan shall remain in full force and effect.


 


11.15.                  Amendment
and Termination.


 


(a)                                  Amendment.  The Board shall have complete power and
authority to amend the Plan at any time; provided, however, that the Board
shall not, without the requisite affirmative approval of shareholders of the
Company, make any amendment which requires shareholder approval under the Code
or under any other applicable law or rule of any stock exchange which lists
Common Stock or Company Voting Securities. No termination or amendment of the
Plan may, without the consent of the Participant to whom any Award shall
theretofore have been granted under the Plan, adversely affect the right of
such individual under such Award.


 


(b)                                 Termination.  The Board shall have the right and the power
to terminate the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the Plan shall not
have any other effect and any Award outstanding at the time of the termination
of the Plan may be exercised after termination of the Plan at any time prior to
the expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not terminated.


 


11.16.                  Special
Provision Relating to Certain Stock Issuances. Notwithstanding anything to
the contrary contained in this Plan, shares of Common Stock authorized to be
issued under this Plan may be issued to pay awards originally made under and
satisfy options originally granted under the Allegheny Teledyne Incorporated
1996 Incentive Plan or any other stock compensation plan adopted by ATI (an
“ATI Plan”), as provided in the Employee Benefits Agreement dated as of
November 12, 1999, between the Company and Allegheny Teledyne
Incorporated.  All shares of Common
Stock issued in payment of an award or grant shall be governed exclusively by
the terms of such award or grant under the applicable ATI Plan, and any terms
of this Plan inconsistent therewith shall be inapplicable to such shares.


 


 


Adopted by Board of
Directors on 11/12/99.


Approved by
Shareholders on 5/4/00.


Amended by Board of
Directors on 11/1/03.


Amended, restated
and approved by Board of Directors on 3/9/04 and by Shareholders on 5/13/04.


 


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